Talon Metals — Capital/Financing Update 2020

May 27, 2020

Form 51-102F3 Material Change Report

		Form 51-102F3 Material Change Report
Item	1	Name and Address of Company
		Talon Metals Corp. (“Talon” or the “Corporation”)
		Craigmuir Chambers, PO Box 71
		Road Town, Tortola
		British Virgin Islands
Item	2	Date of Material Change
		May 21, 2020.
Item	3	News Release
		The news release with respect to the material change referred to in this report
		was disseminated via Newsfile on May 21, 2020 and subsequently filed on
		SEDAR.

Item 4

Summary of Material Change

On May 21, 2020, the Corporation announced it closed a non-brokered private placement of an aggregate of 40,169,500 common shares of the Corporation (the “ Offered Shares ”) which were issued at a price of C$0.10 per Offered Share for aggregate gross proceeds of C$4,016,950 (the “ Offering ”).

Item 5.1 Full Description of Material Change

On May 21, 2020, the Corporation announced it closed a non-brokered private placement of an aggregate of 40,169,500 Offered Shares which were issued at a price of C$0.10 per Offered Share for aggregate gross proceeds of C$4,016,950.

The Corporation intends to use the net proceeds of the Offering for exploration, working capital and general corporate purposes.

Resource Capital Fund VI L.P., an insider of the Corporation (as a result of its beneficial ownership of, or control or direction over, directly or indirectly, greater than 10.0% of the outstanding common shares of the Corporation), participated in the Offering and purchased 21,127,500 Offered Shares under the Offering for gross proceeds to the Corporation of C$2,112,750. Vincent Conte, Chief Financial Officer of the Corporation, participated in the Offering and purchased 100,000 Offered Shares under the Offering for gross proceeds to the Corporation of C$10,000. The participation of these insiders in the Offering constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”). The Corporation has determined that the transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of securities issued to insiders nor the consideration paid by insiders exceeded 25 percent of the Corporation’s market capitalization. The Corporation did not file a material change report in respect of the transaction 21 days in advance of closing of the Offering because insider participation had not been confirmed. The shorter period was necessary in order to permit the

• 2 -

Corporation to close the Offering in a timeframe consistent with usual market practice for transactions of this nature.

In connection with the Offering, finder’s compensation in the form of a 6.0% cash fee and 6.0% finders warrants were paid and issued to certain finders in connection with certain subscriptions, with each such finder warrant entitling the holder thereof to acquire one common share of the Corporation at a price of C$0.10 per common share for a period of two years from the close date of the Offering.

The Offered Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This material change report shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Offered Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Item 5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6 Reliance on Subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7 Omitted Information

Not applicable.

Item 8 Executive Officer

For further information contact Sean Werger, President at (416) 361-9636 x102.

Item 9 Date of Report May 27, 2020.

Forward-Looking Statements

This material change report contains certain “forward-looking statements”. All statements, other than statements of historical fact that address activities, events or developments that the Corporation believes, expects or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Corporation based on information currently available to the Corporation. Such forward-looking statements include, but are not limited to, statements with respect to the expected use of proceeds of the Offering and exploration plans at the Tamarack Project. Forward-looking statements are subject to significant risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Corporation.

Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Corporation disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Corporation believes that the assumptions inherent in the forward-looking statements are reasonable, forwardlooking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.